Mulberry sales hit by luxury downturn
Mulberry has announced that its full year group revenue has declined by 4% due to consumers cutting back on luxury spending.
In a year-end trading update for the 12 months to 30 March, the handbag and accessories brand delivered retail sales in line with the prior year at +0.3%. Mulberry said the performance was driven by growth in Europe, which included the first full period of ownership of its Swedish stores. It also benefited from increased brand awareness in the US and its D2C strategy in the country.
However, this was offset by a 3.2% sales decline in the UK and challenging trading in the Asia Pacific region, which was affected by the macro-economic climate in China and reduced footfall across the region. Despite this, international sales rose by 7.2%.
Mulberry has previously stated that losses for the full year will be impacted by the additional operational costs of its new stores in Sweden and Australia, and ongoing investments in future growth.
Thierry Andretta, chief executive of Mulberry, said: “While we achieved positive revenue growth in the first half, Mulberry has not been immune to the broader downturn in luxury spending experienced in recent months, particularly in the UK and Asia. This decline was partially offset by positive trading in the US, where we have benefited from increased brand awareness.
“Looking ahead, the trading environment in the UK and China remains challenging and we do not expect this to change in the short term. We are therefore managing the business prudently, focusing on executing our strategy and vision to become a global sustainable luxury brand.”
